Arbitrage traders rely on... Select one: a. . superior earnings forecasts ... b. ... predictable relationships between the prices of two or more assets C.... technical analysis
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- 1. Which of the following models for mathematics of the financial markets is dependent on expectations or probabilities of changes in the value of an underlying asset? A. Monte Carlo Simulation B. Black Scholes Model C. Cox-Ross-Rubinstein Model 2. Models for the financial markets are primarily used for all of the following, except, A. Algorithmic Trading B. Technical Analysis (Short term trading) C. Fundamental Analysis (Long term investing D. All of the above 3. Which among the following organizations use financial mathematics as part of their core operation? A. Investment banks B. Government C. Hedge funds D. All of the above 4. S1: Quantitative finance helps to allocate resources to provide the optimum returns. S2: Financial models are accurate. A. Both statements are true B. Both statements are false C.…3) The return on a stock, in a factor model, in a given period will be related to A) firm-specific events. B) macroeconomic events. C) the error term. D) both firm-specific events and macroeconomic events. E) neither firm-specific events nor macroeconomic events. 4) Assume the index model is valid, what inputs will be required to determine covariance between two assets? A) βk B) βL C) σM D) all of the options E) None of the options are correct.Choose the correct answer with justification.In the percentage of sales approach of financial forecasting, the balancing of assets and liabilities sides in a pro forma statement of financial position is achieved by the use of a _______ variable. Multiple Choice Slug. Chug. Balancing. Glug. Plug
- The two main approaches to equity analysis are the relative valuation models and…a. The discounted earnings models.b. The depreciated cash-flow models.c. The discounted cash-flow models.d. The depreciated capital models.Question No. 2: Write short notes on the following: A. Market Segmentation Theory. B. Liquidity Premium Theory.Interpret the chart; A. Moving average interpretation of market phase
- The VIX measures Select one: a.Realized volatility B. Current volatility C. Historical volatility D. Implied volatilityThe risk associated with the overall market is referred to as _____ risk. a. unsystematic b. diversified c. portfolio d. systematicb) Give a graphical example to present the positioning of. E Systematic risk E Risk free rate of returm E Market rate of return, and E Risk premium.
- Which of the following most accurately describes fundamental analysis? a. Makes use of trend chart patterns to determine intrinsic value of security.b. Makes use of information derived from stock prices patterns and movementsc. Makes use of P/E ratiod. Makes use of bottom-up approache. All of the abovef. None of the above. Which one of the following is not a tool in financial statement analysis? a. Horizontal analysis O b. Circular analysis c. Vertical analysis d. Ratio analysisThe underlying assumptions of technical analysis are that A.price move in predictable patterns B. Market value is determined by market news C. Investors are rational